Buying A Home
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Future SAHM and debt to income ratio
My husband and I are looking at buying our first house in the next year. We both work and love our jobs but I really want to be a SAHM. I don't want to be strapped into needing two incomes to support a large house payment if I will eventually be quiting or only working one day a week. How do we plan for the future and what do we tell our broker when we apply for a home loan. In the end I guess it just means we will need to purchase a home well under our approved amt and just have extra money each month until I stop working and things even out. Does that sound right?
-Property Virgin
Re: Future SAHM and debt to income ratio
You can have them preapprove you with both salaries because no matter what they are going to preapprove you for a larger loan than you should get. You need to do the math to figure out what you can afford and what that works out to in terms of payments. You need to account for taxes, insurance etc in that number as well.
If you want to SAH, you need to restrain yourselves and only buy what you can afford easily on his income (including the cost of a growing family). We did this and right now we are paying extra while we are both working, but when it comes down to it, we can easily cover the minimum payments on DH salary alone.
My Chart My Nest Bio
I have to disagree with this - many sellers are requiring a letter of preapproval to accompany all offers, and if they see that you have offered X but are approved for Y, they may not be as willing to negotiate with you.
Get preapproved on your DH's salary alone.
DS1 born June 2008 | m/c at 9w March 2011 | DS2 born April 2012
Or, you can request the pre-approval in a specific amount for this very reason, which is what we did. We qualified for many exponents of what we intended to spend. We told them what price range we were looking in and they gave us a pre-approval for that amount.
Let them approve you for whatever they will allow. Then you need to create a budget and track your spending for at least 2 months to see where your money goes.
Then plug in your DH's salary, what is the max morgauge you can make it on, including taxes and insurance? I assume you'll need to make cuts and such unless you are already living on one salary. FWIW I don't believe that anyone should strap themselves to a house payment that requires 2 salaries, its just not smart and is living beyond your means. I think that has a lot to do with the current situation.
Baby Boy loved for 15 weeks, 5/31/11
Baby Girl loved for 16.5 weeks. 3/1/12
Start NOW to live on one income and save the other (for downpayment, fully fund and emerngency fund, baby fund, new car fund, moving, furniture etc)
You will quickly find out how much house you can afford monthly. Use that figure to guage how much to borrow.
NEVER use the figure you are approved for. You need to have a clear pictue of your personal finances. - What is coming in, and especially what is going out.
You can get preapproved on just your DHs income.
But I would highly recommend stashing your income from the get go - get used to living off of one income now, and you can save your income for future costs.
DH and I are doing this because we know eventually I will be a SAHM, and so we've just basically tucked away all my paychecks into a high interest savings account.